Myanmar's insurance industry is forecast to see premiums of around MMK4tn ($2.65bn) by 2029, more than double the MMK1.75tn predicted would be collected within the next 12 months, according to IKBZ, a leading insurance group in the country.
Growth will be underpinned by a growing public awareness of insurance products.
IKBZ has conducted a comprehensive market survey involving a representative group of 1,000 respondents from seven states across Myanmar concerning their knowledge, attitudes and behaviours towards insurance,
Although currently only 2m Myanmar people have some kind of insurance, and the industry’s penetration is estimated at less than 0.1% of GDP, IKBZ is optimistic about the future of the industry.
“In our survey conducted across Myanmar, we noticed that there is a compelling need for insurance. While only a small sample of our respondents knew about insurance and insurance products, after explaining the concept of life and health insurance, an overwhelming majority of 63% expressed an interest in protecting themselves and their families with an insurance plan,” said Mr Anil Mancham, deputy managing director of IKBZ.
“The current market penetration is very low at only 0.08%, but we fully expect our industry to meet the regional average of 5% within the next 10 years,” he said. He said that this is provided that there would be adequate numbers of insurance professionals and an appropriate suite of products.
A contributing factor to the rising optimism about Myanmar’s insurance industry lies in gradual market liberalisation. In addition, Myanmar’s economy is expanding, with a growing middle class looking for ways to secure their financial future.
Attitudes towards insurance
In fact, the survey indicated that more than half of all respondents, male or female, stated that their goal was to safeguard and improve the quality of life of their family.
Amongst the survey’s 1,000 respondents only 17% were familiar with the concept of insurance and the policy options available in the market, and of those one in three considered insurance products too complicated. This represents a major barrier to buying insurance.
Therefore, IKBZ has embarked on a new strategy to raise public awareness and simplify access to insurance products. It is leveraging KBZ Bank’s extensive network of 512 bank branches and 20 branches of IKBZ Insurance across Myanmar.
IKBZ is also rapidly growing a sizeable force of professional life planners to provide tailored financial planning advice and guide prospective customers through the various options available to help secure their financial future.
Besides increasing its footprint by building up distribution channels to bring insurance closer to customers, IKBZ is also increasing productivity through digitisation and data analytics. As Myanmar has a mobile phone penetration of 85% and some of the fastest 4G networks in Southeast Asia, there is tremendous potential to streamline processes and make purchasing insurance more convenient.
The survey was conducted by IKBZ Insurance in April – May 2019 among a representative group of 1,000 adult Myanmar citizens in seven states. The respondents were representative of the national age distribution and consisted of 50% male and 50% female respondents. The sample also represented a 70% urban and 30% rural split.
IKBZ, part of the diversified conglomerate KBZ Group, currently operates insurance through IKBZ Life Insurance and IKBZ Insurance. Established in 2013, IKBZ Insurance is the first officially licensed private insurance provider in Myanmar.